The opinion of the court was delivered by: Joan B. Gottschall, District Judge
MEMORANDUM OPINION & ORDER
In its eight-count Second Amended Complaint, plaintiff Evergreen Marine Corp. ("Evergreen") raised claims against Division Sales, Inc. ("DSI"), Division Sales U.S., L.L.C. ("DS-U.S."), Division Sales International, L.L.C. ("DS-International"), Stephen Lubelfeld, Michael J. Eber, and American National Bank and Trust Company of Chicago ("ANB"). Specifically, Evergreen has raised claims for: replevin of certain goods against all defendants (Count I); fraud and conversion against DSI and Lubelfeld (Counts II and III); breach of contract against DSI, Eber, DS-U.S. and DS-International (Counts IV-VI); and conversion against ANB (Count VII), DS-U.S., DS-International, and Lubelfeld (Count VIII). Defendant Eber filed a motion to dismiss the counts against him, which ANB joined. Likewise, defendants DS-U.S., DS-International and Lubelfeld moved to dismiss all counts against them.*fn1 For the reasons stated below, Eber's motion to dismiss, which ANB joined, is denied. Further, the motion to dismiss filed by DS-U.S., DS-Intemational and Lubelfeld is granted in part and denied in part.
Evergreen is a Taiwanese ocean carrier. For more than fifteen years, Evergreen had a business relationship with DSI, an Illinois wholesaler of general consumer merchandise. Evergreen would transport by sea shipments of general consumer merchandise from various ports in Asia to ports in California or Washington. From there, Evergreen transported the merchandise by rail to Chicago where the merchandise was made available for pick up by DSI. At some point during the fifteen-year business relationship, a business practice developed that allowed DSI to obtain the merchandise without presenting the original bill of lading for the merchandise to Evergreen at the time of pickup. In May 1999, DSI gave Evergreen a letter "stating that it would not hold Evergreen responsible for the release of goods to [DSI] without the original bill of lading, and that [DSI] would indemnify Evergreen for any delivery of goods without the original bill of lading." (Sec. Am. Compl. at ¶ 12.) Originally, DSI's bank faxed Evergreen a copy of the original bill of lading before Evergreen released the merchandise; then, within a day or two after DSI retrieved the merchandise, the bank sent the original bill of lading to Evergreen by U.S. mail. In early 2000, however, DSi unilaterally changed this business practice: it began sending the original bills of lading to Evergreen "in bunches, once or twice a month" and stopped faxing copies of the original bills of lading altogether. (Id. at ¶ 13.)
At issue in this litigation is general commercial merchandise that Evergreen transported and delivered to DSI between the Fall of 2000 and Spring of 2001 (the "Cargo"). Evergreen instituted this action after discovering that DSI on the verge of bankruptcy and did not have the original bills of lading for the Cargo. In its original complaint, filed on June 27, 2001, Evergreen sought a temporary restraining order ("TRO") to prevent DSI from selling or otherwise disposing of the Cargo, as well as replevin of the Cargo from DSI and injunctive relief. That same day, Judge Wayne Andersen, as Emergency Judge, entered the requested TRO against DSI. The following week, DSI and Evergreen. informed this court that they had reached an agreement to resolve the matters addressed by the TRO. On July 3, 2001, this court entered an agreed order and vacated the TRO (the "Agreed Order").
The Agreed Order applied to the portion of the Cargo that remained in DSI's possession as of June 27, 2001. Under the terms of the Agreed Order, DSI could either return that Cargo to Evergreen or retain it. If DSI elected to retain it, DSI could sell the Cargo only if it complied with further provisions of the Agreed Order: specifically, DSI could sell the Cargo only in the ordinary course of business, could not sell it below cost, had to deposit any sales proceeds into a special segregated account and only access only those proceeds attributable to profit rather than cost, as well as other requirements.
In the eight days following the entry of the Agreed Order, DSI sold approximately 2393 cartons of the Cargo. Then on July 11, 2001, DSI assigned its assets — including the remaining Cargo — for the benefit of creditors to assignee, Michael J. Eber of High Ridge Partners, Inc. ("High Ridge"). Because the assignment for the benefit of creditors included the Cargo, Evergreen contends the assignment violated the Agreed Order.
When Evergreen learned of the assignment for the benefit of creditors, it filed an additional count against High Ridge, who it believed to be the assignee, seeking replevin of the Cargo and a TRO to prevent the assignee from disposing of the Cargo. As it turned out, Eber was the assignee, not High Ridge. At the TRO hearing on July 26, 2001, Eber's attorney informed the court that Eber agreed to be bound by the terms of the Agreed Order. Evergreen later added a claim for a TRO, replevin of the Cargo and injunctive relief against DS-International because Evergreen understood that DS-International was in the process of buying DSI's assets from Eber.
Subsequently, in an asset purchase transaction that closed on September 25, 2001, Eber sold the assigned assets (apart from certain specified, excluded assets) to DS-U.S. According to the bill of sale, "any rights in product or inventory subject to Evergreen litigation" (i.e., this action) were excluded from the sale. (Sec. Am. Compl. at Ex. A to Ex. 5.)
On October 4, 2001, a default judgment was entered in this action against DS-International and on October 11th an order was entered to enforce the default judgment. DS-U.S. (which had been incorrectly named as DS-International) subsequently moved to vacate the default judgment. On October 25th, the court granted DS-U.S.'s motion and vacated both the October 4th and October 11th orders after DS-U.S. represented to the court that DS-U.S. had possession of the Cargo. DS-U.S. and DS-International (collectively, the "DS Entities"), through their attorney, then entered into an oral agreement with Evergreen under which the DS Entities agreed not to dispose of the Cargo (the "Standstill Agreement").
Pursuant to the court's order of December 6, 2001, the Standstill Agreement remains in effect until further order of the court. No further order has been entered, but according to Evergreen, the DS Entities have sold approximately 2954 cartons of Cargo.
Before the court are defendants' respective motions to dismiss the claims against (1) Eber and ANB, and (2) the DS Entities and Lubelfeld. The court will address each in turn, but first addresses the viability of Evergreen's breach of contract claims based on various defendants' breaches of agreements memorialized in orders entered by this court.
I. Breach of Contract Claims Based on Breaches of Agreements Memorialized
in this Court's Orders
Evergreen sued Eber and the DS Entities for breach of contract based on Eber's purported breach of the agreement memorialized in the Agreed Order (Count V) and the DS Entities' purported breach of the agreement memorialized in the Standstill Agreement (Count VI), respectively. The DS Entities contend (in a one-sentence argument) that the court should dismiss the breach of contract claim because their breach of the terms of the Standstill Agreement is punishable by contempt, not liability for breach of contract. The court addresses this argument as it relates to the breach of contract claims against both the DS Entities and Eber even though Eber did not make this argument in his motion to dismiss.
Allowing parties to bring claims for breach of contract based on violations of agreements memorialized in agreed court orders is a troublesome idea. Agreed orders are a routine component of every action. Most courts encourage parties to resolve disputes that arise during the course of litigation by agreement whenever possible. Parties frequently reach an agreement in part to appease the court, and in part because they understand that not all battles are worth fighting. To treat such agreements as potential contracts could well discourage parties from consenting to agreed orders because the agreement could expose the party to liability for breach of contract that would not exist under the virtually identical situation where the parties allowed the court to enter an order without contest. And treating agreed orders as contracts could unduly complicate judicial proceedings, giving rise to satellite litigation and, given the lengthy statutes of limitation applicable in contract actions,*fn2 inviting the parties to litigate breaches of agreed court orders years after the original litigation ended. To make matters worse, the lawyers (and the judge) could be the witnesses — a factor which is far from insignificant. Under the American Bar Association's Model Rules of Professional Conduct ("MRPC"), if a lawyer is "likely to be a necessary witness" in an action, that lawyer cannot also act as advocate (except under limited circumstances). MRPC 3.7; Jones v. City of Chicago, 610 F. Supp. 350, 356 (N.D. Ill. 1984). As a result, any lawyer who is a necessary witness will be subject to disqualification. For that matter, the witness — lawyer's firm may also be disqualified, depending on the circumstances. MRPC 307; Jones, 610 F. Supp. at 359. And if the judge's testimony is required, recusal is likely to be necessary.
Furthermore, Evergreen may well be able to obtain relief without bringing a breach of contract claim. The court has "inherent limited authority to enforce compliance with court orders and ensure judicial proceedings are conducted in an orderly manner." Jones v. Lincoln Elec. Co., 188 F.3d 709, 737 (7th Cir. 1999); 18 U.S.C. § 401. The court has the power to order remedial sanctions "to compensate [Evergreen] for losses sustained as a ...